Japanese Yen Investment and Travel New Opportunities: NT$ to USD Exchange Denominations and Rate Strategies

Is now the right time to exchange for Japanese Yen?

On December 10, 2025, the TWD/JPY exchange rate broke above 4.85, up approximately 8.7% from 4.46 at the beginning of the year. For investors, this wave of currency gains is quite substantial, especially amid the TWD depreciation pressure. Market statistics show that Taiwan’s foreign exchange demand in the second half of the year grew by 25%, driven by travel recovery and increased hedging needs.

The Bank of Japan Governor Ueda Kazuo recently adopted a hawkish stance, pushing up the rate hike expectation to 80%, with a projected 0.25 bps increase to 0.75% at the December 19 meeting (a 30-year high). Meanwhile, Japanese bond yields have hit a 17-year high of 1.93%. The USD/JPY has fallen back from the early-year high of 160 to 154.58, likely oscillating around 155 in the short term, with medium- to long-term forecasts pushing below 150.

Core judgment: It is feasible to exchange for JPY now, but it’s better to do so in batches rather than all at once. The yen, as one of the world’s three major safe-haven currencies (USD, CHF, JPY), clearly functions to hedge against Taiwan stock market volatility. However, short-term arbitrage closing positions may cause 2-5% fluctuations.

Why should you pay attention to JPY exchange?

Demand for the yen extends far beyond travel. From daily consumption to financial allocation, the yen plays a key role.

Travel and consumption: Over 40% of merchants in Japan still rely on cash transactions, with only about 60% credit card penetration. Whether shopping in Tokyo, skiing in Hokkaido, or vacationing in Okinawa, cash needs are unavoidable. Additionally, buyers from Japan and online shoppers often pay directly in yen, and students or working holidaymakers need to lock in exchange rates in advance to avoid sudden fluctuations.

Financial market perspective: The yen’s safe-haven attribute stems from Japan’s stable economy and low debt levels. During the Russia-Ukraine conflict in 2022, the yen appreciated 8% in a single week, while the stock market fell 10%, demonstrating its defensive function. Japan’s ultra-low interest rate policy (currently 0.5%) makes the yen a “funding currency,” where investors borrow low-interest yen to invest in higher-yield USD (about 4.0% US-Japan interest differential). When risks rise, they close positions and buy back yen—this is a classic arbitrage pattern.

Four main channels for JPY exchange

Many mistakenly think exchanging yen only involves banks, but exchange rate differences can cause hundreds of yuan in cost variation. Here is a practical comparison of the latest four methods.

Method 1: Over-the-counter cash exchange

Carrying TWD cash to a bank or airport counter to exchange for yen cash is the traditional and most straightforward method. However, this uses the “cash selling rate,” usually 1-2% worse than the spot rate. Taiwan Bank’s cash selling rate on December 10, 2025, is 0.2060 TWD/JPY (1 TWD = 4.85 JPY), with some banks charging an additional 100-200 TWD handling fee.

Advantages: Safe and reliable, denominations available (1,000/5,000/10,000 JPY), staff assistance available.
Disadvantages: Worse exchange rate, limited operating hours (9:00-15:30 on weekdays), extra handling fees increase costs.
Suitable for: Urgent or small amounts, such as emergency at the airport.

Comparison of cash selling rates at various banks (2025/12/10):

• Taiwan Bank: 0.2060 TWD/JPY, no handling fee
• Mega Bank: 0.2062 TWD/JPY, no handling fee
• CTBC Bank: 0.2065 TWD/JPY, no handling fee
• E.SUN Bank: 0.2067 TWD/JPY, 100 TWD/transaction
• SinoPac Bank: 0.2058 TWD/JPY, 100 TWD/transaction
• Fubon Bank Taipei: 0.2069 TWD/JPY, 100 TWD/transaction

Method 2: Online exchange combined with in-branch withdrawal

Use bank online platforms or apps to convert TWD into JPY and deposit into a foreign currency account, with a more favorable “spot sell rate” (about 1% better than cash selling rate). If cash is needed, withdraw at the branch or via foreign currency ATM, but a fee of at least 100 TWD applies.

For example, E.SUN Bank app allows currency exchange, with withdrawal fees based on the difference between spot and cash rates, starting at 100 TWD. This method suits investors monitoring exchange rates closely, entering in batches at low points (e.g., TWD/JPY below 4.80).

Advantages: 24/7 operation, allows averaging costs through batch entry, better rates.
Disadvantages: Need to open a foreign currency account first, withdrawal incurs extra fees (5-100 TWD cross-bank).
Suitable for: Experienced forex traders, those with foreign currency accounts, can also transfer into JPY fixed deposits (current annual interest ~1.5-1.8%).

Method 3: Online reservation for currency exchange and airport pickup

No need for a foreign currency account. Fill in currency, amount, pickup branch, and date on the bank’s website. After remittance, present ID and transaction notice to pick up in person. Taiwan Bank’s “Easy Purchase” online exchange is fee-free (pay with TaiwanPay, only 10 TWD), with about 0.5% better rates.

A key advantage is the ability to reserve airport branches for pickup. Taoyuan Airport has 14 Taiwan Bank outlets, 2 of which operate 24 hours, allowing last-minute cash collection before departure.

Advantages: Better rates, often no handling fee, can specify airport pickup, well-planned.
Disadvantages: Need to book 1-3 days in advance, pickup time limited to bank hours, reservation cannot be changed.
Suitable for: Planned travelers who want to pick up cash at the airport.

Method 4: 24-hour foreign currency ATM withdrawal

Use chip-enabled bank cards at foreign currency ATMs to withdraw yen cash, supporting 24/7 operation and interbank use (only 5 TWD cross-bank fee from TWD account). E.SUN Bank’s foreign currency ATMs allow withdrawal of yen from TWD accounts, with a daily limit of 150,000 TWD and no currency exchange fee.

Note that locations are limited (~200 nationwide), currency and denominations are restricted (mainstream currencies, fixed denominations of 1,000/5,000/10,000 JPY). During peak times like airports and department stores, cash may run out; avoid waiting until the last minute.

Advantages: Instant withdrawal, flexible, low fees from TWD accounts.
Disadvantages: Limited locations and denominations, cash shortages at peak times.
Suitable for: Tight schedules, urgent needs without visiting a branch.

Cost and risk comparison table for four methods

Based on an estimated 50,000 TWD exchange (data as of 2025/12/10):

Asset allocation after exchanging for yen

Holding yen without interest yields time value loss. The following four options are suitable for small-scale beginners to further allocate.

JPY fixed deposit: The most stable choice. Open an account with E.SUN or Taiwan Bank online, deposit at least 10,000 JPY, with annual interest of 1.5-1.8%, risk-free.

JPY savings insurance: Medium-term holding. Cathay, Fubon Life offer yen-denominated savings insurance, with guaranteed interest rates of 2-3%, combining protection and returns.

JPY ETFs: Growth-oriented. Products like Yuanta 00675U, 00703 track yen indices, can be bought as fractional shares via broker apps, suitable for regular investment.

Forex swing trading: Advanced. USD/JPY or EUR/JPY provide two-way, 24-hour trading with small capital. Platforms like Mitrade offer zero commission, low spread trading, with stop-loss, take-profit, and trailing stop tools.

FAQs

Q: What’s the difference between cash rate and spot rate?
Cash rate applies to physical cash buy/sell, delivered immediately, with a 1-2% difference from spot. Spot rate is used for electronic transfers (e.g., between foreign currency accounts), settled within two business days, close to market price but requires waiting.

Q: How much yen can I get with 10,000 TWD?
Using Taiwan Bank’s cash selling rate of 4.85, about 48,500 JPY. With spot selling rate of 4.87, about 48,700 JPY, a difference of roughly 200 JPY (~40 TWD).

Q: What documents are needed for over-the-counter exchange?
ID card + passport for locals; passport + residence permit for foreigners. For online booking, also need transaction notice. Under 20 requires parental consent. Large amounts (>100,000 TWD) may require source declaration.

Q: What’s the limit for foreign currency ATM withdrawals?
As of 2025, limits are adjusted:

• China Trust: 120,000 TWD per card, 20,000 TWD cross-bank
• Taishin Bank: 150,000 TWD per card, cross-bank depending on issuer
• E.SUN Bank: 150,000 TWD per card (including signature), 20,000 TWD cross-bank

Distribute withdrawals or use your own bank card to avoid cross-bank fees.

Summary and action tips

The yen has evolved from a “travel pocket money” to a tool with hedging and investment value. Under TWD depreciation pressure, appropriately converting to yen can diversify assets.

Key advice: Follow the “batch exchange + post-exchange investment” principle. Beginners can start with “Taiwan Bank online exchange + airport pickup” or “foreign currency ATM,” then transfer yen into fixed deposits, ETFs, or swing trading based on needs. This not only makes travel more cost-effective but also adds a layer of protection amid global market fluctuations.